China’s state-owned China Merchant Port Holdings has paid the final tranche of US$ 584 million in the Hambantota Port investment to the Sri Lanka Ports Authority (SLPA).

In December last year, Sri Lanka handed over the control of the southern sea port of Hambantota to China on a 99-year lease for USD 1.12 billion.

Subsequent to the agreement signed between Sri Lanka Ports Authority and the China Merchant Port Holdings Co. Ltd., US$ 292.1 million was credited to the US Dollar account of Government of Sri Lanka maintained at the Central Bank of Sri Lanka in December 2017.

The government received a payment of 97.365 million US dollars from China Merchant Port Holdings as the second tranche of their investment in January this year.

The $1.12 billion total price is to be used to reduce the Sri Lankan government’s debt to China.

“With this payment, CM Port fulfils the $976 million investment … CM Port has agreed to deposit a further sum of $146 million being investment to be utilized for port and marine-related activities,” the Sri Lanka Ports Authority (SLPA) said in a statement.

The port is near the main shipping route from Asia to Europe and likely to play a major role in China’s “Belt and Road” initiative. But since it opened in 2010, it has been incurring losses due to a lack of commercial activity.

An initial plan to give the Chinese firm an 80 percent stake triggered protests by trade unions and opposition groups. That forced the government to limit China’s role to running commercial operations while Colombo retained responsibility for broader security issues.

The Chinese firm will now hold 70-percent stake in a joint venture with the SLPA, part of a plan to convert $6 billion of loans that Sri Lanka owes China into equity.

Sri Lanka has said the Chinese firm will invest an additional $600 million to make Hambantota operational.